NEW YORK, Dec. 14 /PRNewswire/ -- Effective Dec. 11, Moody's Investors Service assigned an A1 rating to Yolo County Community Facilities District No. 1989-1 (Davis Branch Library) Special Tax bonds in conjunction with the issuance of $2.71 million of Mello-Roos bonds scheduled for public sale on Dec. 15. In assigning the above average grade rating, Moody's noted that the extensive amount of existing development within the district generates sufficient tax revenues to provide a favorable 2.28 times coverage of peak debt service requirements. In addition, the special tax of $42 is levied on almost 13,000 taxable parcels (90 percent of which are single family dwelling units) which considerably reduces the risk associated with potential delinquencies. High land values in comparison with the manageable tax burden of the Mello-Roos tax and overlapping taxes increases the likelihood that favorable tax collection rates will continue. Furthermore, the ten largest taxpayers accounted for only 0.1 percent of special tax receipts in fiscal 1992 demonstrating a lack of dependence on any particular parcel owner. Also cited was the magnitude and established nature of the base which covers the entire City of Davis and a surrounding unincorporated area. It is important to note that the manageable tax levels of this relatively mature community are negligibly impacted by the special tax which supports the current offering. Additional bondholder security is provided by a Debt Service Reserve Fund funded at 5 percent of the par amount of the current offering.
The district is approximately 15 miles west of Sacramento and benefits from a University of California campus and proximity to the diversified economic activities in the state capital. Proceeds of the current offering will provide partial funding for the expansion of the branch library in Davis. The special tax of $42 per parcel was approved by 77 percent of the district voters in November 1989. Tax proceeds are first applied to bond debt service requirements with excess collections providing for certain operating expenses of the expanded library.
Amount of rated debt outstanding: $2,710,000
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/CONTACT: Ronald L. Junker, senior analyst-far west regional ratings group of Moody's, 415-274-1736/